Educational Resource

The Power of
Compound Interest

How money grows when you let time do the heavy lifting — and why starting early is the most powerful financial decision you can make.

The formula

A = P(1 + r)t

AFinal amountPPrincipal investedrAnnual interest ratetTime in years
1

Principal

The amount you invest today. Even a modest starting sum can grow enormously given sufficient time — but principal is actually the least important of the three variables in the long run.

Doubling principal doubles returns
2

Rate of Return

Your annual return determines how fast compounding accelerates. Even a 1–2% difference in rate creates staggering gaps over decades. This is why smart investment strategy matters.

+1% rate ≈ +25% more after 30 yrs
3

Time

By far the most powerful lever. Starting just ten years earlier can outweigh doubling your principal. The compounding effect is almost invisible early on — and then it becomes extraordinary.

10 extra years ≈ 2× the outcome
$10,000 invested at 7% annual return — what it becomes
$10k
You invest today
Your starting point
$19,672
After 10 years
+$9,672 earned
$38,697
After 20 years
+$28,697 earned
$76,123
After 30 years
+$66,123 earned
Growth breakdown — compound vs. simple interest at 7% on $10,000

Tap a bar to see amounts

Principal ($10,000)
Simple interest (flat rate on principal only)
Compound bonus (interest earning interest)

The compound bonus — interest on your interest — starts as a sliver and becomes the dominant source of growth after year 15. It rewards patience above everything else.

A quick mental shortcut

The Rule of 72

Divide 72 by your expected annual return to estimate how many years it takes your money to double. It's a remarkably accurate shortcut that helps you think clearly about long-term goals — and why a few extra percentage points of return make such a large difference.

72 ÷ annual rate = years to double
Years to double your money

Tap a bar for details

Take Action

Ready to make compounding work for you?

Book a free discovery call with our licensed advisers — we’ll help you align super, investments, and strategy with your goals.

15min
Free Discovery Call
90min
Strategy Session
24hrs
Average Response Time
ASIC Licensed
No Obligation
Expert Advice
Tailored Strategy